Tax Agreements with Hong Kong
Is Hong Kong the ideal springboard to start commercial activities with China?Companies registered in Hong Kong allow investments but are also adapted to trading activities, namely with Asia.
A company in Hong Kong can be used as a gateway for investing profits in China, taking advantage of the bilateral "Free Trade" agreement called CEPA, as well as the convention for the avoidance of double taxation between Hong Kong and China.
Under the CEPA agreement (Closer Economic Partnership Arrangement), all goods originating in Hong Kong are automatically exempt from customs duties when destined for the Chinese market.
A HK company buying from manufacturers in China and reselling to European clients may be exempt from HK profit taxes if it can be proved to the Hong Kong Government that these profits were made outside HK.
Profits can then be distributed in full (without withholding taxes) to shareholders in any country.
Other Tax Agreements with Hong-Kong
There are two further double taxation agreements in force; one signed between Hong Kong and Belgium and the other with Thailand.
- Payment of dividends by a HK Company to a holding company based in Belgium involves a withholding tax of 33.99% on only 5% of the dividends.
- Dividends themselves do not incur withholding tax at the HK source. Dividend payments by a HK company to a third party company (intermediary), but whose holding is based in Belgium, are made without withholding taxes at the Belgian source. These terms are subject to one condition: the Belgian company must hold at least 25% of the shares in the HK company for at least one year.
Companies
We offer the creation of your company in other offshore and onshore jurisdictions.
in Hong-Kong
